Welcome to DreamTai Stock Trading Software blog.
Here, DreamTai members can post their views, ideas, opinions and list of stocks which they like and which have given a Buy Signal or Sell signal by DreamTai stock Trading Software.

No, this is just a tip or an idea. You have to work on it and create it a system you are comfortable with.

Even if I create a system, you may not be comfortable with it, because I do not know about your risk profile and investment goals.

The basic premise of this system is that in a strong up trending market, to attain minimum risk and maximum profitability, we should buy during pullbacks.

Now, you can experiment with different time frames, with different stocks and different instruments (stocks, futures or forex) with different moving averages till you come up with a system you are comfortable trading.You should back test the system to see if it worked profitably in the past. Then you should paper trade for some time to see how it performs in the real world.

Next, you should work on the risk management aspects. You should decide which is the best place to place a stop loss order. You should decide whether to place a price based stop or a time based stop or a trailing stop or a combination.

Next, you should decide on the target price and when to take profits.

You should decide if you want to scale in and out of the trades or buy/ sell all the lots in one go.

You should study the risk reward ratios of the past trades to get a reasonable estimate of how the system performs and what is the expected returns from this system.Based on this, you can make a guess-timate on how much money you may be able to make in a given timeframe.

This is hard work, but it pay off in the long run.

4. Can we automate this idea?

Automation does not work in real life. You need human judgment, you need to study the charts and the price action before jumping into the trades.It is true that computers can give you the signal, but you have to study the chart and then make the decision.

Yes they have automated trading in a way, but these systems are constantly being monitored and adjusted by the traders, who are paid millions of dollars in bonuses for their efforts.If it was completely automated, there would be no need of human traders and human intervention.

Sunday, May 16, 2010

The Dow Jones Index looks bearish. But to really know the status of the index, let us look at the underlying components of the Dow Jones index to see if we can try to see where the market is headed in the coming weeks.

It is easy to analyse the components of Dow Jones index, since there are only 30 stocks.

So, I added the 30 stocks to DreamTai, loaded the data and analysed the charts.

And.....the picture does not look bullish. Many of the stocks are below their 20 and 50 days moving averages.

Based on the Power Rankings, I selected the six most bearish stocks..that is the six stocks with the most negative power rankings.